Coleman Patterson ARN Columns

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The following articles appeared in the Business section of the Abilene Reporter-News.

Taking a cue from the little engine that could is crucial in child development, April 27, 2008, 2D.

“I think I can. I think I can!” Those were the words of the undersized train engine as she pulled the train of dolls and toys up the hill in the popular children’s book, The Little Engine That Could, by Watty Piper. Piper’s book is an updated version of a story that originated in the early twentieth century. It teaches children about optimism and the power of positive thinking and the sense of accomplishment that comes from taking on and succeeding at big goals.

Teaching people at early ages that success comes from hard work, persistence, and personal sacrifice can have important influences on society in years to come. According to Professor Harold Jones, the author of Personal Character and National Destiny, stories like The Little Engine That Could help develop personal values that affect how people work and their goals and aspirations. Children who learn that hard work and accomplishment are important and desirable personal characteristics begin to see events in life as opportunities to accomplish exceptional things themselves.

Jones argued that the stories we teach to our children help set the course of the nation in years to come. Children who value exceptional achievement turn into adults who value exceptional achievement. When high-achievement people control the organizations and institutions of society, they influence how a society functions and the things that it values and aspires to accomplish. A nation full of high-achievers functions differently than one without people “programmed” for exceptional performance. Jones suggested that the stories, lessons, and cultural examples that we hold up to our children early in their lives helps instill in them a sense of achievement, success, and work ethic.

Jones based much of his work on concepts of “Learned Needs Theory” by David McClelland. Needs explain why people want to do the things they do and have been used to describe human motivation—Maslow’s hierarchy is probably the most well known of these theories. Learned needs are acquired early in life through family experiences. Once acquired, they serve to guide the behaviors of individuals throughout their lives. The three learned needs identified by McClelland are achievement, power, and affiliation. A person with a high need for achievement will view and seek out events in life as opportunities to accomplish unusual and exceptional things. A person with a high need for power will search for opportunities to be in control and one with a high need for affiliation will look for ways to include and be included by others in events.

Today’s workplace is made up of people who grew up at different times and were exposed to different “stories” as they were raised. For some, hard work and achievement is programmed into them. For others, strong needs for power or affiliation drive their behavior. Others grew up with negative and painful stories. Managers should understand the needs and motivations of their workers and seek ways to develop cultures of exceptional performance with people of different backgrounds and types of personal motivation.

Decision-making means legal, ethical choices, April 20, 2008, 2E.

The decision-making process involves several distinct stages. The first step is to define the problem. Alternative solutions to a problem are then generated before one is chosen as the solution to implement. After a solution is implemented, it should later be evaluated and altered if necessary. Not all problems are the same and not all alternatives are acceptable.

Decision-making involves selecting an alternative to implement from among a host of possible alternatives. Many times, the alternatives that decision-makers select and implement are those with which they are familiar or those that are readily available. For example, each day when I get in my car to return home from work, I choose an alternative that is very familiar and easy for me to implement. However, on any given day I could choose a different alternative from among an almost unlimited number of other effective solutions. I could bum a ride from one of my friends or acquaintances from work, call a taxi, ride a bus, walk, ride a bike or skateboard, or choose any combination of those alternatives.

In addition to those alternatives, there are also a host of illegal alternatives that I could choose from. I could steal or hijack a vehicle, sneak onto public transportation, or ride in a taxi and stiff the driver of the fare. However, I never consider those alternatives as legitimate possibilities because they are not legal. Selecting and implementing one of those could result in criminal prosecution, fines, incarceration, and other unpleasant consequences. Illegal alternatives are screened out as unacceptable before ever being evaluated as possible solutions.

Some alternatives are legal, but are also never considered as possible solutions. For example, I could con a motorist into driving me home under the guise of a personal or family emergency. I could play on the sympathy of a coworker by faking an injury for a ride or to borrow a vehicle. I could also concoct a hard-luck story to solicit money from friends or strangers for bus or cab fares. These alternatives never come up for consideration in my mind because they violate my sense of ethics and morality. Violating my ethical principles would make me feel guilty and ashamed of my actions and could cost me the trust of those who helped me—if they ever learned that I took advantage of them. Only the alternatives that are legal and ethical become possible solutions to a problem.

As more and more organizations embrace the notions of empowerment and shared decision-making, it is becoming increasingly important that workers know how to make decisions. They must understand how to define problems and develop alternative solutions that are both legal and ethical. To do that, workers need to understand the legal environments in which their organizations operate and the ethical guidelines that drive their operations. Organizational leaders must continually train and educate their workers on these issues and clearly espouse their expectations for ethical and legal behavior. Failure to do so can be costly.

Decisions about making decisions, April 13, 2008, 2D.

When beginning a home repair project, it is helpful to have all necessary tools close at hand. It is often advisable to even have extra tools within reach should the project be more complicated than originally thought. The larger the variety of tools in a handyman’s toolbox, the more likely he will be to fix the problems that he encounters.

In a way, a manager is like an organizational handyman. Managers identify and solve many types of problems (e.g., personnel, planning, scheduling, budgeting, technology, operations, facilities, policies, resources, etc.) with the best interests of their organizations in mind. Some problems are straightforward and predictable and others are more complicated. A good manager, like a good handyman, is able to quickly determine the types of tools that he needs to fix the problems that he encounters.

Sometimes the tools that are needed to solve organizational problems are co-workers and the knowledge, insight, and creativity that they possess. People use the knowledge that they gain from past experiences to define and remedy the problems that they encounter. Knowledge can be gained from direct personal experiences or from the experiences of others. Groups are able to outperform individuals on mental tasks in large part because of the diversity of experiences that members bring to their groups. When the experiences of group members are used to solve problems instead of just those of a single manager, better solutions usually arise. The benefits of group problem solving, however, come with costs—primarily, the time spent by group members away from their normal work responsibilities.

Not all of the decisions that managers make need to be solved with the help of coworkers. Managers can make some decisions with little or no input from workers. Effective managers know when to solicit input from others and when to solve problems by themselves.

The Normative Decision Model, developed by Victor Vroom and his associates, gives explanation to the appropriate level of worker involvement in the decision-making process. Decision acceptance and decision quality drive the model. When it is important that workers buy into and accept the decision, they should be included in the decision-making process. Likewise, when it is important that exceptional and high-quality solutions be developed, more people should be included in the process. Time should also be considered when selecting the appropriate degree of worker involvement—as time available to make decisions decreases, more autocratic decision styles are appropriate.

The model also describes five decision-making styles that range on a continuum from “autocratic” to “group.” The autocratic style is one where managers make decisions independently and autonomously. The middle dimensions involve the manager collecting relevant information from others, consulting with individual coworkers, and consulting with groups of workers before making decisions. Under the “group” style, managers allow their workers to solve problems. The appropriate decision-making style is dictated by characteristics of the situation—acceptance, quality, and time. Like tools, different decision-making styles are appropriate for different types of problems and skilled managers know when and how to use each of them.

Looks like we’re on a road to nowhere, April 6, 2008, 2D.

As a teenager during the early days of the music video revolution, I remember trying to watch music videos whenever I could get the chance. One of my favorite videos was “Road to Nowhere” by the Talking Heads. Throughout the song, the lead singer is seen steadily running in place in a small, superimposed rectangle in the lower right corner of the screen while images of all types pass by in the background. The lyrics tell about being on a road to nowhere—that line is repeated many times during the song. Watching the singer continually running during the video is mesmerizing and somewhat depressing. What a sad fate it would be to perpetually run nowhere.

Unfortunately, many organizations also seem to run on the road to nowhere. Those without a clear purpose and goals, those without a vital and relevant mission, and those without people who aspire to accomplish new and interesting things are often heading nowhere. As with a ship that is pushed along aimlessly by the tide and wind, a directionless organization might find that it will eventually move away from where it started. Sometimes an aimless movement to “nowhere in particular” can result in good things for the organization. However, when the tide and wind is used in conjunction with a desired destination, navigation, course corrections, and an able crew, ships can be quickly and safely maneuvered to their destinations. Effective captains guide effective ships—they prepare their ships for the journey, they constantly monitor environmental conditions, they plan and follow navigable routes, and they assemble and work with able crews.

Effective organizations need effective leadership to guide them “somewhere.” Leadership is about vision, direction, and movement. Effective leaders provide followers with destinations to which they aspire and they work with their followers to reach them. When the journey to the destination seems perilous, leaders provide their followers with confidence and assurance. Effective leaders prepare their organizations for the journey and they constantly scan the environment for threats that might slow down or impede their journey and for opportunities that could move them along faster. They chart courses of movement appropriate for the abilities and limits of their organizations and they make periodic adjustments to their planned routes. Effective leaders also build effective work teams. They inspire team members to work toward desirable destinations and they work with followers to reach their goals.

If your organization is one that aspires to “maintaining the status quo” or simply “going with the flow,” your organization may be on the road to nowhere—and that is not typically a place that organizations seek to go. To go “somewhere” in a purposeful and coordinated manner, organizations need leaders and leadership throughout their ranks—from executive-level positions all the way down to first-level positions. When destinations are reached, leaders guide their organizations to new and better destinations. Vision, goals, direction, teamwork, and continuous change are the ingredients of leadership and the keys to keeping organizations off of the road to nowhere.

Are you a follower? March 30, 2008, 2D.

Have you even taken a good hard look at the people you work with? Are some of them able to identify problems and take the necessary steps to solve those problems with little help or direction? Are some of them eager to help and do whatever they are told to do, but cannot seem to think for themselves? Do some of them seem to know and have solutions to all of the problems within the organization, but do nothing to help solve them? Are there others who seem incapable of independent thought and action and need prodding and guidance for everything they do? And are there others who seem to do and speak up just enough to stay out of the spotlights of attention and responsibility?

Robert Kelley, in his scheme of follower behaviors, identified two independent dimensions on which followers differ. One dimension has to do with follower activity and behavior and the other deals with thought and problem identification. Kelley’s behavior dimension ranges from active to passive. The thought dimension ranges from independent and critical to dependent and uncritical. Kelley combined those two dimensions to identify five types of followers.

Followers who are passive in their actions and uncritical in their thinking are called “Sheep.” Sheep lack the abilities to independently identify problems or the courses of action needed to solve those problems, and they need prodding and pushing to get them to perform. “Yes People” are dependent in their thinking, but are active and willing to do whatever they are asked to do. People who see all of the problems within an organization and have solutions for them, but are unwilling to act until prodded are known as “Alienated Followers.” Alienated Followers are the ones who would rather sit around and complain about the ways things work than actually doing anything about the problems themselves. “Survivors” are those who exist where the two dimensions intersect; they are active and independent enough in their thinking to stay out of trouble, but also just passive and dependent enough to not be noticed or given extra responsibilities. Kelley labeled people who are active and independent in their thinking as “Effective Followers.” Effective Followers are those who can see and figure out solutions to problems and have the energy and activity to solve them. They are self-active and independent and work for the common good and purpose of their organizations.

Healthy organizations are made up of active and independent-thinking followers. Training and development techniques and a sincere effort on the part of management to elicit employee involvement might be used to turn Yes People into Effective Followers. Strong leadership can also create cultures of openness, shared decision-making, and employee involvement to transform Alienated Followers into Effective Followers. Under effective leadership, Survivors might also be encouraged to step up and take ownership of problems and become more active. Organizational policies, reward schemes, and high-involvement cultures must be created to promote active behavior and independent and critical thinking in organizational members.

eBayers, beware the tempting ‘escalation of commitment’ trap, March 23, 2008, 2C.

Experienced eBay buyers respect and understand the bidding process. Bidders on eBay are instructed to enter the highest amount that they are willing to pay for an item when placing their bids. After deciding upon and entering that amount, the most rational thing for a bidder to do is to wait for the auction to end before checking to learn the outcome of the offer. One of the worst things to do is continually check on the status of the status of the auction and get into a bidding war with other bidders.

It is very tempting to raise a maximum bid several dollars when you find out that someone else has outbid your maximum offer. If you were originally dedicated to spending no more than $40 on an item, a new maximum bid of $42 is only two dollars more. And when competing bidders raise the price to $44, it only seems logical to invest three more dollars and push the price to $45. By the time the auction ends, a bidder who was originally willing to invest no more than $40 may find that he has spent considerably more.

Escalation of Commitment is the name given to the process of making decisions in the pursuit of a course of action that seem rational based on previous actions, but in reality are quite irrational. Once invested in a course of action, it many times seems wiser to throw more investment into the action than cutting losses and moving on to something more profitable. The bidder who has surpassed her original and well-reasoned maximum bid amount many times rationalizes making higher bids in terms of what will be lost if she does not increase her bid and reasons that another slightly higher bid is justified because the auction can be won with just a few dollars more.

Organizations are susceptible to the pitfalls of escalation of commitment. They sometimes throw money and resources after unprofitable ventures because they have irrational senses of gain and loss. They will sometimes invest more into a failing course of action in the pursuit of success than if they had taken an earlier loss and moved on to another venture. Pouring more money into promoting an unprofitable product line rather than dumping it, retaining unproductive employees instead of letting them go, repairing and maintaining defective equipment rather than scrapping it and buying new equipment, spending more time and effort developing strategies to make unproductive activities profitable rather than starting over with new options, and sinking additional money into over-budget building projects are all forms of escalation of commitment.

Decision makers need to look at what the option will yield in the future rather than looking at what has been invested in the action in the past. Sometimes the best course of action is to stop, turn, and head in a new direction. If organizational decision makers are so dedicated to success at any cost, they may find that success ultimately costs them everything.

Servant leaders differ in approach, March 16, 2008, 2D.

Servant leadership is a popular term in management and organizational circles these days. Churches, schools, volunteer organizations, and businesses of all types have jumped on the servant leadership bandwagon, but how many actually understand the concept and appreciate how drastically different it is from traditional models of management?

Robert Greenleaf coined the term “Servant Leader” to describe a leadership style characterized by serving and meeting the needs of people. He argued that the conscious desire to serve others eventually creates a desire to lead. Individuals who seek to be servants first and then rise to positions of leadership in organizations tend to interact with others and guide organizations differently than people who aspire to be leaders first. Servants as leaders seek to meet the highest priority needs and interests of their people. Servant leaders desire for their people to grow and to “…become healthier, wiser, freer, more autonomous, and more likely themselves to become servants.”

Traditional management thinking suggested that workers follow the commands and dictates of their superiors. Superiors made decisions and retained control over all the dimensions of the work and organization. Workers acted as the hands and feet of management, carrying out the will of the decision-making brain. In traditional management, organizations were viewed as machines and workers were viewed as machine parts. When workers broke down or gave up, management would replace them with other workers who would comply with orders and efficiently perform their work. Power and control resided with management; workers merely did what they were told to do.

Rather than tell, servant leaders ask. Servant leaders ask people about their needs and desires and ask for worker input on decisions affecting the organization. Servant leaders treat their followers as self-active, responsible, and intelligent people rather than mindless machine parts. By attending to worker needs, servant leaders free their followers from obstacles and barriers to performance and allow them to figure out and suggest ways to improve their work. They allow workers to take ownership in the workplace and the decisions affecting the organization. In the process, workers develop feelings that they are appreciated, respected, and trusted. By empowering workers and giving away authority, servant leaders actually gain more power from their followers.

Being a servant leader does not mean being a doormat to workers. Effective parents serve their children while guiding them in positive directions and steering them away from harmful or unhealthy decisions. Effective parents allow children to grow and explore new things, but are also willing and able to give corrective feedback when necessary. The goal of any parent-child relationship is for the child to meet or exceed the abilities and accomplishments of the parent. A servant leader’s relationship with followers is no different.

The ideas that managers should serve and develop workers into employees who self-actively manage and make decisions for an organization and that superiors are servants of the followers is backwards from traditional management thinking. The success of servant leaders comes from serving the needs of others.

Learned needs determine our course in life, March 9, 2008, 3D.

If you were given the task of getting a tennis ball into a box, how would you do it? Would you stand next to the box and then extend your arm and drop the ball directly into the box? Or might you position yourself a distance away from the box and toss the ball into it? Assuming that you succeeded in your first attempt, how would you position yourself for a second attempt? Would you do it the exact same way or would you make it more challenging for yourself and move further away from the box?

David McClelland and his well-known research on learned needs gives explanation for the distances that people choose when attempting such a task. People with a high need for achievement position themselves at distances that are challenging, yet also have a fairly high probably of success. People with a high need for achievement are driven to accomplish exceptional and unusual things. Simply dropping the ball into the box would not provide them with a sense of accomplishment or achievement. Standing too far away brings in elements of luck rather than skill.

McClelland’s research also identified two other learned needs: the need for power and the need for affiliation. People with a strong need for power have a built-in need to be in control of others and situations. McClelland described power needs as being personalized or socialized. A personalized power need is characterized by wanting power and control for personal reasons—for the gratification that comes from having others do what you want them to do. A socialized power need is characterized by wanting power to use for the good of others. A person with a high need for affiliation is someone who actively seeks out the company of others. They have a strong desire to include others in events and to be included by others.

Learned needs, as described McClelland, come from experiences in early life. The stories that children hear and learn, the lessons that they gain from parents and influential others, and the messages that they receive from their environments all help shape and determine what is regarded as important and worthwhile. Eventually, those lessons influence how people approach life, interpret events, and behave. People who value achievement as an important quality will eventually come to view opportunities in life as ways to accomplish unusual and exceptional things. Likewise, those with strong needs for power and affiliation will see and interpret life events as opportunities to meet those needs. The learned needs that people develop in life serve as lenses by which they see and approach the world.

Organizations are social entities that exist to accomplish goals and objectives. Power and influence are necessary to bring about compliance and performance from others. A combination of people who are high in needs for achievement, power (preferably socialized power), and affiliation is needed for well-coordinated, functional, and vibrant organizations. Organizations of all types need people who achieve, influence, and work well with others.

When planning improvement, remember geometry, March 2, 2008, 3D.

The Pythagorean theorem states that for a right triangle, the square of the length of the hypotenuse is equal to the sum of the squares of the other two lengths. For a triangle with two sides that measure three and four units, the hypotenuse will equal five units. The square of three (nine) plus the square of four (16) equals the square of five (25). The hypotenuse will always be shorter than the sum of the lengths of the other two sides.

From the work of W. Edwards Deming came the ideas of Total Quality Management (TQM). TQM is a management philosophy and method used in production settings and is concerned with producing high-quality products. Many of Deming’s ideas about creating quality and high-performance organizations have been extended and applied to areas beyond production. One of the central ideas of his methodology is the notion of “continuous improvement.”

Continuous improvement is concerned with on-going and gradual changes in the ways of production and work. Making small and incremental changes over time can result in big changes in the long run. When change is continuous and gradual over time, less effort is needed at any point in time than what would be required for a radical and drastic change over a short time period. And at any point in time, an organization that is continually improving and “moving up” is performing better than one that continues in an original course of action and changes only periodically and drastically.

Anyone who has pulled a washing machine up the ramp of a moving truck on a dolly, as opposed to physically picking it up and lifting it into the back of a truck, can appreciate the help that a ramp provides. Each step up a ramp raises the load gradually to the level of the truck. Wheeling a heavy load on the ground from the end of the ramp to the back of a truck and then lifting it into the truck requires more distance moved and much more exertion on the lift.

A trip up the hypotenuse of a triangle is shorter than a trip down one side, stopping and turning 90 degrees at the right angle, and then moving up the other side. With all else held equal, the distance, time, and energy needed to move at right angles is greater than moving on the hypotenuse.

Deming’s notion of continuous improvement is equivalent to gradually moving up the hypotenuse of a triangle; like moving up a ramp. Discontinuous change, or radical change, is analogous to proceeding down one side of a triangle without any change, stopping and changing directions at the right angle, and then restarting and continuing in a new direction. And as with a heavy load that has to be lifted into a truck, the change and movement from the right angle to the end of the second side can be very difficult for those involved in the change.

When planning for organizational change, remember your geometry!

If everyone was incredible…, February 24, 2008, 2D.
(an expanded version of this article to appear in The Baptist Educator)

I have heard it said that good preachers can find sermons in almost anything they encounter. I think that it is also possible to find lessons in management and leadership in many things as well.

The Incredibles, a movie made for kids and adults, provides one such example. The movie tells the story of a family of superheroes who become locked into battle with a nemesis who makes himself powerful by inventing machines and weapons. Buddy, the nemesis, reveals that his ultimate plan is to sell his inventions so that everyone can be superheroes. “And when everyone’s super,” Buddy cautions, “no one will be.”

I recently received a recruiting brochure in the mail from a nearby, peer university. The brochure showed pictures of attractive and happy-looking college students smiling and having fun at scenic campus locations and events. It had images of professors and students interacting in classroom settings, pictures from athletic events, and images of students engaging in worship and Bible study. The text described the institution as being warm, caring, and academically challenging. Prospective students were encouraged to choose this school because of its small class sizes, interaction with caring and committed faculty members who take personal interest in their students, relevant and interesting academic programs, and its faith-based education. The brochure touted the things that made the institution “super.”

The institution did not come across as super or extraordinary. I felt like I had seen the brochure countless times before from a countless number of schools—prospective students who receive the brochures probably feel the same way. The brochure described important, relevant, and interesting characteristics of the institution, but they were not super. The school came across as very common. In fact, there are three competitors in Abilene that could claim those same distinguishing characteristics.

To be super, institutions and their offerings have to be different from others—they need to be unique. The concept of choosing one or more important consumer dimensions to compete with others for consumers is known as the unique selling proposition (USP). The USP is the thing or “angle” that firms use to differentiate themselves from their competitors in the minds of consumers. The things that make the institution unique must be things that consumers find relevant and desirable. A good USP is one that competitors cannot imitate or replicate and when exploited over the long run can create monopoly-like advantages for organizations and become forms of sustainable competitive advantage.

To attract the attention and interest of prospective consumers, organizations must develop and offer unique features, products, services, programs, and experiences that make themselves different from their competitors. To be unique, organizations, their offerings, and the messages that they broadcast into the marketplace must be unlike others. Simply stating important and worthwhile characteristics does not make an institution unique in the minds of consumers, especially when their competitors tout the same things. Having the same super characteristics as everyone else makes no one super. Might there be a sermon in that?

Have confidence in confidence, February 17, 2008, 2D.

“I don’t need the map, I know exactly where I am going.” Those were the words that rang though my head as I left my house on the way to a conference in Dallas. I had been to the conference location four times before and was certain of my route. It was not until I actually saw the huge pile of dirt in the middle of the road about a mile from my destination that I realized my planned route to the conference had hit a dead end. After getting back on I-20, taking another exit from the highway, and driving around in rush-hour traffic for more than an hour, I finally arrived at the conference—only ten minutes late.

My adventures in driving without direction in Dallas reminded me of my summer travel adventures in Europe. I spent 17 days traveling with my family this past summer driving through Austria, Germany, Liechtenstein, Switzerland, Italy, and Slovenia. On that trip, we took wrong roads, turned around, drove on pedestrian pathways, missed exits, drove through ice and snow, read signs incorrectly (in German, Italian, and Slovenian), and encountered many one-way streets that we had expected to be two-way. Throughout our travels, however, we eventually reached every location to which we were heading. Sometimes the trips were simple and sometimes they were quite complicated. Toward the end of our European driving adventure, we were quite confident that we could overcome almost any obstacle thrown in our way.

As I drove around Dallas looking for familiar-sounding roads and scanning my memory for images of the correct layout of roads and geography, I found myself unusually calm and confident. It occurred to me that if I could survive and succeed in my European driving mishaps, I could certainly reach my destination in Dallas.

The psychological processes at play in my mind were what researcher Albert Bandura described as self-efficacy. The confidence gained by succeeding in a task helps a person gain confidence when faced with similar tasks. Success driving in Europe helped me feel more confident when driving without direction in Dallas.

Many leadership development programs are built upon the ideas of creating self-efficacy in program participants. The confidence gained from succeeding in leadership and teamwork exercises can help build confidence in participants that will benefit them in real life situations later. While it is quite unlikely that leaders and managers will have to lead workers through high-ropes elements, creative problem-solving exercises and team-building tasks, or camp-type team competitions, they will have to lead others through tasks and situations that require problem solving, effective communication, conflict management, creativity, and teamwork. Effective leadership development programs provide participants with opportunities to study and practice leadership and teamwork in controlled environments that can generalize to other situations. The skills and competencies developed must mirror those of the workplace in order to build confidence and self-efficacy in program participants. That confidence can help leaders from feeling lost when they confront new and unknown situations.

Measuring job satisfaction, February 10, 2008, 2D.

We like our house. It has a driveway that is big enough to ride bikes and play basketball on, a fenced backyard that helps contain our dogs, enough room inside for the family to spread out, and a location that is convenient to many of the places that we visit and shop at regularly. There are things about the house that we would like to have improved, like closet space, another bedroom, and modern bathrooms, but overall, we are quite satisfied with where we live.

The idea of being overall satisfied with our house, but less-than-satisfied with some characteristics of the house is similar to feelings of satisfaction with jobs. It is possible to be satisfied with a job in a global sense and at the same time be dissatisfied with one or more particular components of the job. A person may perceive the actual work that he performs to be meaningful and enjoyable, but cares little for the people that he works with. Likewise, an employee might be very satisfied with the opportunities for promotion within her organization, but receives far less pay than she feels is appropriate for her job and abilities.

Job satisfaction is typically regarded as being related to absenteeism, turnover, and performance to some degree. The idea that overall job satisfaction can differ from satisfaction with particular dimensions, or facets, of a job is well understood among organizational researchers. The Job Descriptive Index (JDI) is a survey instrument that measures five facets of job satisfaction: pay, promotion, supervision, the work itself, and co-workers. Overall job satisfaction cannot be computed by simply summing the scores of the facet dimensions because they are independent dimensions.

Satisfaction with pay includes attitudes and perceptions about the amount of pay received in relation to personal expectations and comparisons with others. Perceiving that opportunities exist for promotion and advancement within an organization leads to satisfaction with promotion opportunities. The relationships that workers have with supervisors and co-workers contribute to satisfaction on those two job dimension facets. When the jobs performed by workers are perceived as meaningful and important, they tend to experience higher levels of satisfaction on “the work itself” dimension.

Studying job satisfaction with a focus on facets provides insight into the attitudes, needs, and motives of workers. Ministers, teachers, and social workers most likely receive high levels of satisfaction in their jobs from the work itself. Other people might receive the greatest levels of satisfaction from their jobs from being around and interacting with coworkers and supervisors. High pay might keep some people in their jobs even when they regard their work as less meaningful and when they receive little satisfaction from other facets of their jobs.

Sometimes it is desirable to have employees provide overall evaluations of job satisfaction—where they account for all pertinent aspects of their jobs in one single response. At other times, managers might need to assess employee job satisfaction more specifically with an account of the different facets of job satisfaction.

Commitment is a multiple-layered variable at work, February, 3, 2008, 6D.

As social beings, humans form bonds and relationships with many types of people and for many different reasons. Some relationships are based on family bonds, some are based on love and emotions, and others form for mutual benefit and safety. Interpersonal relationships can be long-term or short-term and can be deep or superficial. At different times and stages in life, the strength, reasons behind, and nature of relationships between people can change. The choice of whether to remain in an interpersonal relationship is determined in large part by the degree of commitment to the other person and the relationship.

The Merriam-Webster online dictionary defines commitment as “the state or an instance of being obligated or emotionally impelled.” In this definition, commitment is identified as a multi-dimensional concept. Being “obligated” and being “emotionally impelled” are two different reasons for remaining in an interpersonal relationship. However, most interpersonal relationships probably involve both of those dimensions.

Humans spend much of their lives working and living in groups. And as with interpersonal relationships, there are many different reasons why people join and remain in groups (e.g., family, love and emotions, mutual benefit and safety, etc.) and the relationships that members have with their groups can be long- or short-term, can be deep or superficial, and can change over time. The concepts of commitment to a group or organization are similar in many ways to commitment to an interpersonal relationship—including the multi-dimensional nature of the concept.

Researchers John Meyer and Natalie Allen defined organizational commitment as a psychological state characterizing an employee’s relationship with the organization and affecting his or her decision to remain with the organization. They identified three types of organizational commitment: affective, continuance, and normative commitment.

Affective commitment is rooted in a member’s emotional attachment to an organization. It forms because the individual identifies with the goals of the organization and willingly assists the organization in achieving those goals. Continuance commitment is based in the real and perceived costs and benefits of leaving or remaining with an organization. “I am getting paid too much to leave” or “Where else will I be able to have the benefits that I have with this company?” are statements that demonstrate continuance commitment. Lost friendships and social interaction are social costs of leaving an organization—and contribute to continuance commitment. Normative commitment refers to a perceived sense of obligation or loyalty. Feeling that you “owe” the company something in return for what it has done for you or sensing that you have moral obligation to remain with the organization characterize this form of commitment. Affective, continuance, and normative commitments refer to “want to,” “have to,” and “ought to” orientations toward organizational membership.

Meyer and Allen suggested that all three types of commitment operate on organizational members simultaneously. An employee can be committed to an organization in affective, continuance, and normative senses at the same time—and those levels can change over time. Understanding these concepts is key to developing deep, long-term, and positive relationships with employees.

Fight stress by building resiliency, January 28, 2008, 2D.

One of the most stressful times of my life was suffering through my comprehensive exams and dissertation in graduate school. I had invested years of my life and passed up on other productive opportunities to earn a graduate degree. The successful completion of graduate school required that I successfully complete the comprehensive exam and dissertation. The reasons that these two events were stressful are because they involved uncertainty and importance.

Ongoing and long-term stress can be harmful to individuals. High blood pressure, cardio-vascular problems, fatigue, and compromised immune systems are some physical reactions to continued stress. Feelings of helplessness and being out of control, anxiety, depression, and worry are psychological reactions to stress. If not properly managed and controlled, stress can have detrimental effects on people.

To help cope with the stress that came from the final two obstacles of my formal higher education, I would play racquetball several times a week with a group of friends. I also regularly played in softball and basketball leagues with friends from church. When engaged in those activities, the nervousness and anxiety of graduate school disappeared—they were out of my mind. Participating in activities with groups of friends who were not consumed with the same types of worry and anxiety that I was experiencing helped keep things in perspective for me. My friends also provided me with encouragement and support through my trials.

Staying physically active, keeping my problems in perspective, and having a group of supportive friends helped me develop resiliency. Resiliency, as defined in the dictionary, refers to “the capability of a strained body to recover its size and shape after deformation caused especially by stress.” Resilient people “bend” rather than “break” while under stress and then recover once it is removed.

There are three types of resiliency—physical, psychological, and social. Physical resiliency comes from developing and maintaining a strong and healthy body. Eating well, engaging in regular and vigorous exercise, and getting plenty of rest are ways to enhance your body’s ability to handle and bounce back from stress. Psychological resiliency comes from developing a hardy personality, accepting a love of challenge, recognizing small wins, and maintaining a balanced lifestyle—that is, allowing time for many types of activities and interests. Finding mentors, supportive friends, and others who have been through similar experiences helps develop social resiliency. A combination of all three types of resiliency should be nurtured and maintained.

The American Institute of Stress reports that the estimated cost of stress to U.S. industry, in terms of accidents, absenteeism, employee turnover, diminished productivity, workers' compensation awards, tort and Federal Employers’ Liability Act (FELA) judgments, and direct medical, legal, and insurance costs, is $300 billion annually. By developing programs to help workers build resiliency, businesses and organizations can save untold amounts of money on stress-related expenses and simultaneously develop healthier and more productive workforces. It may be costly to firms to create and maintain employee health and wellness programs, but not doing so might be even more costly.

Understanding equity theory and keeping employees motivated, January 20, 2008, 2D.

As a kid, I was taught that there were certain questions that you did not ask adults—doing so was considered inappropriate and rude. These included questions about age, weight, and income.

In many organizations, questions and talk of pay and compensation among coworkers is also taboo. Workers intentionally avoid discussing the subject with coworkers and managers often try to keep the pay and compensation of organizational members known only by those involved in payroll-related functions. The reasons for keeping pay and compensation a secret is probably less about being inappropriate and rude and more about keeping workers motivated, productive, and feeling that they are being treated fairly and equitably.

Stacey Adams, in his Equity Theory research from the early 1960s, gave explanation to how and why knowledge of the outcomes that others receive from their work influences the performance and motivation of workers. In his classic study, he designed an experiment where the quality and rates of work on a task were recorded for subjects in his study. After a baseline performance was determined for each subject, the researchers planted a coworker, who was part of the study, into the experiment. The planted coworker worked along side the subject doing an identical task. After a certain amount of time, the planted coworker told the subject how much he was being compensated for the task and revealed his supposed background and qualifications for the job/

Once subjects learned what the coworkers were being paid and their backgrounds and qualifications, the researchers studied the effects of that knowledge on subsequent performance of the subjects--on their quality and rates of production. In the experiments, the researchers manipulated the information they revealed to the subjects. In some cases, the planted coworkers reported that they were paid more than the subjects and in other conditions that they were paid less. Adams also changed the supposed qualification levels of the planted workers--sometimes subjects were more qualified than the planted workers and sometimes they were less qualified.

Adams concluded that workers perceive themselves as being over-rewarded, under-rewarded, or equitably-rewarded in relation to the outputs and inputs of their coworkers. When subjects felt that they were being compensated fairly with respect to the rewards and qualifications of the coworkers, they did not alter their performance after knowledge of their coworker’s compensation was revealed. In cases where subjects felt over- or under-rewarded in relation to their coworkers, their performance changed after they learned what the coworkers were being paid. Subjects changed their rates and quality of work to restore perceptions of equity with their coworkers—sometimes the changes would be beneficial to an organization and sometimes not.

Equity Theory has many implications for managers and organizational policy makers. As a motivation model, it has direct bearing on policies such as wage and salary structures, compensation and benefits, training and development, and employee attitudes and morale. Managers should fully investigate and the concepts of Equity Theory—asking questions about these concepts is expected and required.

Regression analysis the way of the future, January 13, 2008, 2D.

Imagine the advantages of being able to see into the future and accurately predict things that will happen. Students would be able to know exactly what to study and learn for assignments and exams, parents would know how to help their children avoid harmful situations, investors could pick rewarding opportunities and avoid costly ones, and emergency workers could head off hazardous and harmful situations before they arise. The ability to accurately see the future could help people make decisions in the present that lead to things they want in the future.

Organizations and businesses of all types could also benefit from knowledge of the future. The abilities to forecast demand and supply, prices and profit margins, raw material and operational costs, and customer flow and employee staffing needs could all help organizational decision makers choose the courses of action needed to best benefit their organizations. Unfortunately, the ability to know the future is not something that human beings possess.

The management science field has tools and techniques that can be used to solve many types of management and organizational problems—such as, inventory management, production and process control, product mixing and blending, transportation assignment and scheduling, maximization and minimization, and employee scheduling. There are also forecasting techniques that decision makers can use to make educated guesses about their futures. Linear regression is one of the most popular and well known of those techniques.

Regression analysis is grounded in the concepts of correlation. Correlation is a measure of relationship between variables. Variables can be positively or negatively related or not related. A positive relationship means that as one variable increases in value, its associated value does as well. For example, a higher number of sales calls placed should result in higher number of sales made. A negative relationship means that as one variable increases, the other variable decreases. As the number of days missed from work increases for a worker, the performance for that person should decrease. A zero correlation, or no correlation, indicates that two variables are not related—such as the number of soft drinks consumed at work and the number of maintenance calls made for copy machine repairs.

When a relationship exists between two variables, it is possible to predict one with the other. The stronger the relationship between the variables, the better the predictive power. For example, when fuel efficiency of a vehicle is known, it is easy to forecast fuel consumption when distance is known. When a known relationship is not as strong, such as the effects of an advertising campaign on the sales of an item, the ability to predict the outcome is not as certain. Regression analysis measures the relationships between variables and builds a mathematical model to best describe those relationships—which can be used to predict an outcome variable with one or more predictor variables. With education and training on regression techniques, which can be run in Microsoft Excel, managers can forecast the future for their organizations.

Resolve to be specific with your goals, January 6, 2008, 2D.

At this time of year, it is common to hear people talk about setting New Year’s resolutions. Becoming healthier by eating better, increasing activity and fitness levels, and losing weight are popular resolutions. As common as it is to set New Year’s resolutions, it seems almost as common to hear about people breaking their resolutions. Somehow, the good intentions behind many people’s resolutions fail to ever materialize into sustained change.

Goal-Setting Theory, a popular motivation model, helps give explanation to why people hold to or fail to meet their resolutions. Research on goal setting and performance has identified that goals, to be motivating, should be specific, challenging, accepted, and provide feedback.

“I want to lose 10 pounds by Valentines Day” is a much more specific goal than, “Over the next year, I want to get rid of the spare tire around my middle.” Goal specificity gives people exact targets and timelines against which to measure their performance. Accomplishing a series of small, incremental, and short-term goals gives the goal setter the ability to see movement toward the overall goal.

Goals that are challenging are more motivating than goals that are too hard or too easy. Setting a fitness goal of being able to run a mile in four minutes might be unrealistically difficult for many resolution makers and eventually cause them to give up prematurely in frustration. Setting a fitness goal of being able to run a mile in 20 minutes is probably too easy for many people and would not drive people to focus, train, and significantly alter their behaviors to attain that goal.

People do things that they believe in and find important to do. When goals are not accepted by the people who are responsible for meeting them, performance is less likely to occur than when people endorse and accept the responsibility for making them happen. If people do not accept ownership and responsibility for meeting their goals, they will be more likely to give up on them when distractions and difficulties arise.

When people know how their current actions and levels of performance stack up against expected performance, they can sustain acceptable performance or make corrective actions to bring unacceptable performance back into line with expectations. Someone who has lost only two pounds at the end of January while striving toward a “Lose 10 pounds by Valentines Day” resolution should realize that corrective actions are needed. Waiting until Valentines Day to first step on a scale does not permit the goal setter to make corrective actions or maintain successful strategies during the performance period.

For resolutions to become realities, they should be specific, challenging (that is, neither too easy nor too hard), accepted, and have ways of measuring attained performance against predefined standards. The things that lead to successfully attaining New Year’s resolutions are the same things that contribute to goal attainment in organizations by individuals and groups. If one of your New Year’s resolutions is to accomplish greater things at work, try implementing the principles of Goal-Setting Theory.

True leaders are visionary, sacrificial, December 30, 2007, 2D.

Braveheart, Mel Gibson’s 1995 movie about the Scottish freedom fighter William Wallace, is a great case study in leadership. Through inspirational acts and appeals, persuasive communication, vision setting, personal example, risk taking and self-sacrifice, Wallace rallies his countrymen to fight and defeat the English in battle. The contrasts of Wallace’s character to those of King Edward I (Longshanks), the noblemen, and Robert the Bruce and his father provide additional insight into the dynamics of true leadership.

Whereas Longshanks ordered his troops into battle and oversaw the fighting from the safety of a distant hilltop, Wallace personally led the charge into battle and fought alongside the men who believed in and followed him. Whereas Robert the Bruce and his noblemen were tempted by Longshanks’ offers of land and titles, Wallace wanted nothing but freedom for his people. And whereas self-interest, power, and political maneuvering drove the actions of the noblemen, Wallace’s motives were portrayed as pure and selfless—for the benefits of his people and future generations of Scotsmen.

Toward the end of movie, Robert the Bruce finally grasped the true meaning of leadership. In anguish, he told his father, “Men fight for me because if they do not, I throw them off my land and I starve their wives and children. Those men who bled the ground red at Falkirk fought for William Wallace.” The film ends with Robert the Bruce taking up the cause of William Wallace and leading his men into battle against the English.

Leadership is a common word that is used in all types of organizations. Although it is commonly used, it is less commonly practiced. How many people can say that they have worked with people who could be called visionary, inspirational, and self-sacrificing? How many “leaders” have you worked with that possesses pure and unalterable motives and really look out for the needs and interests of others? In what circumstances have you encountered such leaders?

Richard Couto, in his writings on Citizen Leadership, argued that our society is filled with leaders of extraordinary quality who work out of the public spotlight in the service of societal needs and ills. Citizen leaders, as Couto called them, rally and mobilize others to remedy needs in their communities without receiving the usual types of honor and reward that are desired by those in paid positions in for-profit organizations. Citizen leaders put their causes ahead of themselves and work relentlessly to enlist others to join the cause and then mobilize their efforts and public sentiment toward remedying the problem—sometimes at great personal cost.

The core ideas of leadership that are evident in Citizen Leadership are equally important in for-profit organizations. Today’s business world is in desperate need of leaders—the popular and professional management literature says so. Like Robert the Bruce, managers and executives must realize that people rally around leaders and the visions and causes that they espouse and if they only rely upon position and authority to get workers to perform, they will not be viewed as leaders.

Motivation is the key, December 23, 2007, 2D.

Motivation is “that which arouses, directs, and sustains behavior.” Understanding motivation is critical to managers and those responsible for bringing about performance from others. Performance arises when people “want to” perform a task and when people are “able to” perform the task. In other words, performance is a function of motivation and ability—if either is missing, performance will not occur.

Theories are explanations for how things work and are derived using the principles of the scientific method. Theories of motivation give explanation to why people “want to” do things and come in two types—content theories and process theories.

Content theories focus on the things that energize and direct behavior that are internal to individuals. They focus on needs and how needs drive behavior. Maslow’s Need Hierarchy, Alderfer’s ERG Theory, Herzberg’s Two-Factor Theory, and McClelland’s Learned Needs Theory describe that human behavior is driven by the desire to satisfy personal needs—such as survival, safety, social, esteem, growth, achievement, and power needs. Organizational designers and policy makers can use content theories to create motivating work places through job design, pay and compensation schemes, social structure policies, and through opportunities for employee growth and development. Knowledge of the content theories gives decision makers the power to establish long-run motivating environments by fulfilling worker needs.

Process theories give explanation to short-run and individual performance. These theories focus more on cognitive processes and conscious choices of workers. Goal setting theory, reinforcement theory, equity theory, and expectancy theory are some of the more popular process theories. In these theories, individuals consciously choose to act and willfully pursue courses of action because the decisions make sense to them. Rewards that come from performance, avoidance of unpleasant consequences that come with non-performance, actions to maintain or restore equity with referent others, and confidence that performance can be attained and that performance will be rewarded, form the foundations of these models. Process theories can be used to bring about individual performance in the here and now. Getting employees to speed up their productivity could be induced with rewards for success or reprimands for non-compliance. Boosting a worker’s belief that he or she can do the task at hand and that desirable rewards will be returned for successful completion are other ways of applying process theories in organizations.

Organizations are made up of people—it is people who give them life and people who perform their work. Successfully guiding and directing workers to the attainment of individual and group goals is a big part of a manager’s job. To most effectively do that, managers should be aware of why people do the things that they do. Managers should invest time learning and implementing the concepts of both content theories, with their attention on the satisfaction of human needs, and cognitive-focused process theories. Additional information about these concepts is readily available on the web or it can be found in common management, leadership, and organizational behavior textbooks—or you can give me a call.

Creative destruction means opportunity, December 16, 2007, 2D.

When I was a kid, my father worked in New York City and we lived in Connecticut. I remember my grandparents coming to visit us from their home in New Orleans each summer for two weeks. They made their cross-country trip each year by train—which even in the 1970s seemed like an outdated method of transportation.

While still common in many parts of the world, the popularity of long-distance train travel in our country has become negligible compared to what is was a century ago. The rise of the automobile and highway systems, and the birth and development of airline transportation relegated the train-travel industry to an almost forgotten mode of transportation—just as trains did to horse and stagecoach travel in earlier times.

The forces that propelled interest in automobile and airline travel over railroad travel caused many railroad-related jobs to become irrelevant and unnecessary. Many jobs and industries ceased to exist when the new, superior, and preferred types of transportation came into being. The lost railroad-related jobs were replaced in the economy by countless jobs in the automobile, highway, and airlines industries. New technologies, jobs, and industries supplanted old technologies, jobs, and industries.

This replacement process is not limited to the transportation industries. The medical field is continually announcing new procedures, treatments, and ways to prevent and remedy diseases and afflictions. Scientists and researchers are constantly discovering new things that improve the ways we live and work—in agriculture, engineering, and through pure and applied research in chemistry, biology, and physics. Advances in electronics and computer technology have given us countless new products that radically replaced old products and equipment—from more powerful personal computers to bigger televisions to smaller cell phones. Each radical product advancement brings with it new technologies and new jobs. Old technologies, jobs, and products are lost in the economy.

Economists refer to the process of new and better products, ideas, and innovations replacing old ones as “creative destruction.” New innovations bring with them new sets of required skills, knowledge, and abilities of workers. The jobs related to the old products become irrelevant and new jobs become in demand. Our capitalistic economy is one that encourages and rewards the invention and creation of new and better things. Entrepreneurs and innovative companies constantly look to find and develop the next “big thing” for the market and to make themselves and their companies wealthy in the process. Because “new and better” is the norm of the market, the required skills, knowledge, and abilities of workers in the marketplace are also constantly changing.

New developments and innovations mean new opportunities for innovative companies and workers. Companies and workers who possess knowledge of outdated technologies and the skills needed to produce unwanted offerings will find themselves irrelevant in the marketplace. Individuals and organizations must constantly keep their knowledge and skills up-to-date with the market to make themselves relevant in the future—through continuous training, development, and education, and strong senses of curiosity and personal discovery.

Inertia can be good or bad for a business, December 9, 2007, 2D.

One of my favorite things about taking science classes was when the teacher conducted experiments during class. It was always intriguing to try to figure out the purpose of the equipment and a challenge to predict the outcome before the experiment was conducted. For one experiment, the teacher appeared in class with a four-foot length of rope and a bicycle wheel. The wheel had an unusually long, rubber-covered axle that extended out about five inches on each side of the wheel.

For the experiment, the teacher held onto the two ends of the axle and spun the wheel on the floor and then held it up for the class to see. The wheel spun so fast that the spokes on the wheel were nearly invisible. While it was still spinning, the teacher rested one side of the axle on a table and quickly looped the rope under the axle on that side. He then lifted up the still-spinning wheel by the rope and his other supporting hand. He quickly asked the class what would happen to the wheel if he removed his hand—allowing the wheel to be supported on only one side by the rope. In the minds of most, they probably pictured the unbalanced wheel falling to the floor and rolling across the room. When the teacher removed his hand, the wheel tilted slightly to the side where his hand had been and then found balance on the rope. The spinning wheel remained upright even though it was being supported on only one side of the axle.

The result of the experiment was explained using Newton’s first law of motion; which states that, “An object at rest tends to stay at rest and an object in motion tends to stay in motion with the same speed and in the same direction unless acted upon by an unbalanced force.” The spinning wheel remained moving in the same direction and resisted falling from the rope. The wheel’s inertia kept it upright on the rope until friction slowed it down enough to become unbalanced and fall from the rope.

Metaphorically speaking, organizations also have inertia and are subject to the same laws of behavior as moving objects. The expressions, “let’s get the ball rolling” and “let’s keep the ball rolling” refer to starting and sustaining collective work. Inertia within organizations comes from goals, organizational polices, roles, structure, processes, cycles of events, technology, and patterns of behavior. As learned from Newton’s first law, inertia is typically harder to establish than to maintain and it shows us that changing organizations can also be difficult.

Organizations are, by their natures, resistant to change and require “unbalancing” forces to steer them in new directions. Those forces might be crises or emergencies, actions of charismatic and visionary leaders, organizational cultures, or needs for new strategies and methods of competition. For managers and organizational leaders who believe that “the only thing constant is change,” the concepts of organizational inertia should be something they understand and appreciate.

Groups outperform individuals on mental tasks, December 2, 2007, 2D

An effective and interactive way to demonstrate the ability of groups to outperform individuals on mental tasks is the “Lost on the Moon” exercise. In the activity, participants are given a list of items that are available to them while they await rescue on the dark side of the moon. Variations of this exercise also exist—like being trapped in the dessert or wilderness.

The first step in the exercise is to have participants complete the assessment completely by themselves. Participants must rank the importance of 18 different items for survival on the moon—which include things like tanks of oxygen, a compass, matches, milk concentrate, flares, a solar-powered radio transmitter, and a tarp. During this phase, participants are not allowed to ask questions, talk with others, or look up answers in any way. They should rely only upon the knowledge that they possess in their heads at the time of the activity.

After everyone has completed their individual rankings, participants are then divided into groups of four to six people each and complete the exercise again as teams. It is important that everyone in the group participates and gives input into the group ranking. A group of five with only two contributing members is really only a group of two with three bystanders. All members must participate in the group output.

When the groups complete their rankings, group and individual answers are scored by comparing them against “expert” rankings for the items. The closer the participant answers match the expert rankings, the better the score on the exercise. A member of each group should calculate the group score as well as their own individual score. The facilitator of the activity will ask each group to provide its group score on the exercise as well as the average of the scores of the individual members. The group and average individual scores should be written somewhere so that all participants can see them.

When the directions are followed and participants take the exercise seriously, the group score will almost always be better than the average individual score. It shows that individuals, when solving mental tasks, only have their own experiences and knowledge to draw upon to solve problems. When individuals work together as teams, their abilities to solve problems are enhanced. This synergistic effect is a result of the combination of the knowledge and past experiences of the group members. The past experiences of four to six people will always be greater than the knowledge and past experiences of any single member.

As a group development tool, exercises like these help show the importance of groups and teamwork to organizational performance. Managers can use these exercises to show organizational members the importance of individual differences and experiences to a team and to demonstrate the importance of all members working together to solve problems. The investment of a little time to conduct a “Lost on the Moon” exercise with groups of workers could return big benefits for organizations.

Yes, Napolen, you have to have skills, November 25, 2D.

The 2004 film “Napoleon Dynamite” swept the country and created a cult-like following. The movie’s main character, Napoleon Dynamite, is a high school super-nerd who, in one scene, becomes distraught when he learns that his friend Pedro has a date for the high school dance and he does not. In his despair, Napoleon tells Pedro that he has little hope for finding a girl because he does not “have any good skills.” When Pedro asks him what he means by that, he replies: “You know, like nunchuku skills, bow hunting skills, computer hacking skills…Girls only want boyfriends who have great skills.” Possessing great skills, in Napoleon’s mind, would make him attractive to others.

Skills are also important for prospective and current employees to possess. Communication, problem-solving, leadership, and teamwork skills can help make employees attractive to organizations. Technology and computer skills are becoming more and more important in today’s workplace—in fact, word processing, e-mail, and Internet browsing skills are necessities in many positions and occupations. One extremely powerful, yet often overlooked and underutilized software program is the spreadsheet program. Microsoft Excel is probably the most widely used and available spreadsheet program around today. Although its abilities to integrate with other Microsoft programs, like PowerPoint and Word, makes Excel useful to know, its true power comes from its ability to automate intricate and sometimes complex quantitative relationships among many variables. Spreadsheets can be used to perform mathematical calculations like ordinary calculators; however, when spreadsheets are constructed using equations instead of raw data, they can be much more powerful and useful than a simple calculator. By relating variables in a spreadsheet to each other through formulas, functions, and equations, spreadsheet programs can be used to easily run “what if” and probabilistic scenarios—which are very useful for forecasting and decision making.

Using Excel, I can easily determine the grades that my students need to earn on their final assignments for various final grades in the course. By creating spreadsheet programs that link all of the variables together through equations, I am able to analyze how a change in a grade on any assignment during the semester affects the final grades. I can also easily tell students the exact grades that they need on a final paper to earn any grade in the course. Once the formulas are written in a spreadsheet, they can easily be copied to other cells in the spreadsheet. The additional work to calculate “what if” grade scenarios for dozens or hundreds of students is not much more than for a single student. Entering the raw grades for the students is the most time consuming part of the process.

Spreadsheet skills have become essential in many organizations. To help your students, colleagues, or coworkers develop these critical skills, the HSU SIFE team has developed a mobile computer lab that can come to your organization to teach spreadsheet and other basic computer skills. If you would like information on how to schedule on-site spreadsheet training, visit our website at www.hsusife.com.

Symptoms should lead to solutions, November 18, 2007, 2D.

When automobiles have performance problems, they typically end up at repair shops for help. Part of the mechanic’s job is to listen to the vehicle owner’s description of the things wrong with the automobile in order to figure out how to fix the problem. Likewise, when a sick patient visits a doctor for help, the doctor will ask the patient to describe the symptoms that he or she is experiencing. Doctors also typically ask additional questions to the patient to help pinpoint the source of the problem. Both mechanics and doctors seek to fully diagnose and understand their patients’ problems before they develop appropriate solutions. Only when problems are clearly defined can solutions to remedy the problems be designed.

An automobile experiencing brake problems does not need a new radiator and one experiencing problems with overheating probably does not need new brakes. Likewise, a patient experiencing fever and congestion does not need a solution remedy for an ingrown toenail. Solutions must be designed to treat the root problems and ailments.

When workers experience performance problems at work, it is often the manager who must diagnose and develop remedies to those problems. If employee performance is suffering, it is a symptom of a motivation problem, an ability problem, or a combination of the two. For employees to successfully accomplish their work, they must “want to” and be “able to” perform.

Motivation theory gives explanation for why people want to do things. Receipt of extrinsic and intrinsic rewards, goal attainment, avoidance of punishment, fulfillment of needs, and maintenance of perceptions of equity and fairness are some of the ways that employee motivation has been conceptualized and studied. Ability problems stem from inadequate or improper experience and training or a lack of organizational resources (e.g., physical, human, financial, or technological) and other types of organizational support (e.g., priorities, politics, permissions, etc.). Without motivation and ability, performance will not occur.

Managers must accurately determine whether performance problems arise from issues of motivation or ability. If the true reason for poor performance is an employee’s restricted access to timely and necessary information, it makes no sense to try to remedy performance with the use of rewards or punishments. Likewise, when employee motivation is the problem, it would be wasteful to throw additional financial or human resources at the problem. The solution must fit the true problem.

Mechanics and doctors diagnose problems and then design solutions to remedy them. They actively listen to their customers and patients and ask probing questions to accurately pinpoint the causes of the problems. Mechanics and doctors also know their subjects extremely well. Through training, education, and apprenticeships, they develop expertise in how their subjects work and understand exactly how to repair and bring them back to health.

Managers and organizational leaders should actively communicate and interact with their people to understand and foresee performance problems. They should also invest considerable time and effort studying how organizations function and operate. Only then can performance problems be identified and solved most effectively.

U.S. style of marketing at odds with other cultures, November 11, 2007, 2D.
(this is a really bad title for this article)

In my graduate International Human Resource Management class at the International University in Vienna this past summer, I had 15 students from 12 different countries. The students came from China, India, Spain, and many countries of the former Soviet Union. They sought out graduate business education at IU Vienna because of its American style of education and its international emphasis.

I taught from books that addressed the course topics from international perspectives. The readings sparked fascinating discussions among students about how the concepts applied to their particular countries and cultures. I also showed a collection of videos on the management philosophies of Frito-Lay, Starbucks, Southwest Airlines, and IDEO. All four videos provided clear examples of contemporary American management theory in action. The videos showed organizations that valued the input and participation of workers, emphasized employee empowerment and involvement, and encouraged workers to question current ways of doing things and to offer suggestions for ways to improve operations. The CEO of IDEO said that he intentionally hires people “who do not listen” to their bosses.

The management practices and philosophies portrayed in the instructional videos, as I discovered, were extremely foreign to most of the students in my class. Many students found it amazing that lower-level workers could offer input to their higher-level managers. To question higher-ranking workers or to be involved in the decisions of the firm was seemingly forbidden in the organizations with which they were familiar with back home. In many of the students’ national cultures, there was an emphasis on command, hierarchy, and authority.

Geert Hofstede, in his research on the influence of national culture on management theory and practice, gives explanation for the reactions of the students in my class. Hofstede identified four dimensions on which national cultures differ. The first, individualism versus collectivism, refers to whether people prefer to act as individuals or as members of groups. The second, masculinity versus femininity, refers to whether assertiveness, performance, success, and competition are preferred over quality of life, warm personal relationships, service, care for the weak, and solidarity. Uncertainty Avoidance is a dimension that refers to the degree to which people in a country prefer structured over unstructured situations. Power Distance, the last dimension, is the one that explains the students’ bewildered reactions to the management videos. Power Distance refers to the degree of inequality that people in a culture regard as normal. It ranges from relatively equal to relatively unequal. American culture is on the “relatively equal” side of the continuum.

Many of the students in my summer class came from countries with national cultures high on power distance—that is high inequality. In those cultures, managers and workers are not viewed as equals. It would be inappropriate for lower-level workers to question or offer recommendations to higher-level workers. In today’s global economy, it is important to understand and appreciate differences in national cultures and their influences on organizational performance. Things commonplace and natural in one culture might be viewed as wrong in other cultures.

Leadership not limited to positions of power, November 4, 2007, 2D.

In American culture, the word “leader” is used to mean many things. Many people equate holding a position of authority with leadership. A promotion into a management position, for example, is viewed by many as moving into a leadership position. If “leader” is meant to mean power, influence, and control, then an appointment to a management position is a leadership position. However, when the concepts of authority, power, leadership, and management are broken down and analyzed, differences between the concepts can be identified. Being a team leader, for example, is not the same as being a team manager. A more thorough investigation of these topics is needed to better understand their differences and similarities.

Leadership is a particular type of authority relationship. Authority comes from the power that one holds over followers or subordinates. In some cases, authority comes from the position that one holds in an organization, as described in the constitution or by-laws of the organization, and other times it is willingly given to the power holder by the followers. The power gained from others arises from being viewed as special in some way. Admiration, respect, charisma, expertise, and other personal characteristics can all add to perceptions of personal power and authority. Power and authority gained from the position that one holds is termed “position power” and that which is earned and gained in the minds of people is called “personal power.”

Amitai Etzioni, in his classic works on authority, compliance, and organizations, made distinctions between what he called officials, informal leaders, and formal leaders. He said that those who gain their authority over others solely from the positions that they occupy are called officials. Athletes comply with the rulings of referees and umpires in athletic events because of the authority vested in those positions—athletes and coaches do not comply because of personal characteristics of the officials.

On most sports teams, there are frequently players who arise as team leaders. They become team leaders not because of positions that they occupy, but because they are viewed as special. Team leaders are the ones who inspire, motivate, and guide their teams with their effort, hustle, and performance. Etzioni called those who influence others solely through the use of personal power as informal leaders.

Formal leaders, as described by Etzioni, are those who possess both personal and position power. A well-respected and inspirational head coach would be a formal leader. Such a coach possesses position power and personal power. Etzioni uses the term “leader” to refer to those who possess personal power—as with an informal team leader or a formal inspirational coach.

Promotion into a management position is often accompanied by an increase in position power. However, true leadership is not dependent upon position—it is related to personal power. A promotion into a new management position can have the effect of turning an informal leader into a formal leader or adding more position power to someone who was already a formal leader. It can also create officials.

Formal study of leadership relatively new 'science', October 28, 2007, 2D.

Leadership has been around as long as people have lived and worked in groups. The Old Testament and other ancient texts are full of examples of the accounts and accomplishments of leaders. The ancient Egyptians even had hieroglyphic symbols for leadership, leader, and follower 5,000 years ago.

The formal study of leadership, using the procedures and principles of the scientific method, is relatively new—within the past 100 years. Beginning first with an analysis of traits and characteristics of leaders, the field then moved into an analysis of leader behaviors. Researchers concluded that there are two types of behaviors that leaders exhibit—task-oriented and people-oriented. Leadership researchers from Ohio State University labeled the two types of behaviors “Initiating Structure” and “Consideration.” Initiating structure refers to direction, goal facilitation, task-related feedback, well-defined patterns of organization, and procedure. Consideration, on the other hand, refers to behaviors stressing friendship, mutual trust, respect, interpersonal warmth, concern for the feelings of followers, and participative communication. Some researchers of this era concluded that leaders who exhibited high-task and high-people behaviors were most effective in the workplace. Those beliefs led to the idea of “Universal Leadership”—where the “universally” best style of leadership was the combination of high-task and high-people behaviors.

The proposition that there was a “best” style of leadership caused some researchers to reexamine and refine their models and thinking. With that reexamination, the contingency era of leadership thought was born. It was realized that characteristics of the situation help determine the most appropriate and effective combination of task and people behaviors. Paul Hersey and Ken Blanchard hypothesized that “follower maturity” (or follower readiness) was the situational characteristic that determined the optimal combination of task and people behaviors. Hersey and Blanchard describe follower maturity as a combination of willingness and ability of followers to perform a task. As followers increase in willingness and ability, their maturity levels increase and the combinations of task and people behaviors required to most effectively guide them change. As follower maturity increases, the required levels of task behaviors decrease. People behaviors increase through the middle levels of maturity before dropping at higher levels of maturity.

According to Hersey and Blanchard’s Situational Leadership Theory, followers who are unwilling and unable to perform a task are of lowest follower maturity and require a “telling” (high task, low people) style of leadership. As followers increase in maturity, leaders should advance to “selling” (high task, high people), “participating” (low task, high people), and “delegating” (low task, low people) styles of leadership—each one appropriate for a progressively higher level of follower maturity.

Hersey and Blanchard’s model makes it clear that leaders need to adjust their behaviors and styles of leadership toward followers in relation to their degrees of task-related maturity. Effective leaders can identify the appropriate degrees of task and people behaviors required in all types of work situations. Effective leaders recognize that people, tasks, and situations change and that leadership styles must also change to bring about optimal compliance and performance from their people.

Don't miss out on global markets, October 21, 2007, 2D.

In his book, “The World is Flat,” Thomas Friedman describes three eras of global trade. The first stage occurred between the time of Columbus until around 1800—Friedman named that era Globalization 1.0. The moving force behind the trade was countries and governments. Global commerce and trade was conducted by and between countries.

Globalization 2.0, as described by Friedman, lasted from 1800 until 2000. The driving forces in this era of trade were multinational companies. Falling transportation costs, brought about by the steam engine and railroad, and later falling communication costs helped drive the expansion of companies and the distribution of their products into new and international markets.

Around the turn of this century, we entered a third era of global trade and commerce. In this new era, Globalization 3.0, the driving force is not countries or multinational organizations; it is individuals. Today’s information and communication technology allows individuals to collaborate and engage in global commerce and trade like never before.

Amazon.com and eBay.com are two of the most popular retail destinations on the web. Both allow individuals and small businesses to sell products to the millions of web surfers who visit and shop their sites. Most small businesses have traditionally been limited to sales in their local markets. By offering their products for sale through the web, small businesses can reach and exchange goods and services with customers in distant markets—across the country or around the world.

Personally, I have sold books and college apparel to dozens of customers across the country through eBay and its affiliated companies. I have also bought hundreds of items through eBay and Amazon over the years including: wooden racquetball racquets, college apparel, shoes, books, DVDs, CDs, electronics, sporting goods, appliance parts, toys, and children’s clothing. Almost all of the eBay exchanges and many of the Amazon purchases were conducted with individuals and small business owners. Very few of the transactions occurred with people located in Texas—most occurred with buyers and sellers from across the United States.

One of my favorite purchases, and one that clearly demonstrates Friedman’s Globalization 3.0, was my acquisition of a new nickel-plated, pocket trumpet. The instrument sounds like a full-size trumpet, but is much smaller. Through eBay, I bought the trumpet for $92.00 (including shipping and a money order fee) from a seller in New Delhi, India. The trumpet was delivered to my house about three weeks after the transaction was completed. By linking up with a seller in India through eBay, I unknowingly engaged in a “Globalization 3.0” business transaction. By quickly setting up an eBay account and listing his products, the seller in India was able to offer his goods to millions of potential new customers in the United States.

The transactions just described did not occur as the result of trade agreements between countries or through the reach of large-scale multinational companies. Rather, they occurred between individuals and small businesses that found each other through worldwide e-commerce websites. Is your organization missing out on today’s global market?

Leadership remains a key skill to develop, October 14, 2007, 2D.

Explore the books in the business section of any popular bookstore and you will find a seemingly endless array of books devoted to leadership and management development. Some of those are self-help books, others try to sell a particular course or method of leadership development, and others are more theoretical in nature.

In addition, there are a variety of leadership development courses offered through colleges and universities, community education programs, and business development and consulting firms. The reason that there is so much attention paid to leadership development is that effective leadership is critical to all types of organizations and because it is so complicated. From an academic perspective, leadership development requires training in psychology, sociology, management, economics, political science, history, critical thinking, communication, ethics, and other fields that provide insight into the understanding of human behavior in individual and group work environments. The study of leadership from the perspectives of those disciplines takes considerable time and effort.

As beings living in the times of the most remarkable discoveries and inventions that mankind have ever known, we like to think of ourselves as “cutting edge” in all realms of science and discovery—this includes leadership studies and development. However, the ideas that people need to study philosophy, history, and human nature before assuming positions of responsibility in society is nothing new.

Plato (428-347 B.C.) wrote in The Republic that the solution required to break the reciprocal nature of tyranny and democracy in an ideal society is leadership education and development. “…Until philosophers are kings, or the kings and princes of this world have the spirit and power of philosophy, and political greatness and wisdom meet in one, and those commoner natures who pursue either to the exclusion of the other are compelled to stand aside, cities will never have rest from their evils.” Plato continued that line of reasoning by stating, “…There will be discovered to be some natures who ought to study philosophy and to be leaders in the State; and others who are not born to be philosophers, and are meant to be followers rather than leaders.” He goes on to explain that the philosophers of which he spoke are those who love knowledge, are averse to corruption and ambition, and seek truth, justice, courage, and temperance. Only after years of training and education, are Plato’s philosophers prepared to govern the State.

Regardless of whether people intend to lead organizations or local, state, and national governments, they should seek training and education to accelerate their leadership abilities. Rather than learning simply through personal experience and trial and error, would-be leaders can learn leadership philosophies and skills more rapidly and efficiently through education and training. Training programs should expose participants to the rules, principles, and philosophies of leadership, teamwork, and organization as well as provide opportunities for skill development in communication, critical thinking, problem solving, conflict resolution, creativity, and persuasion and influence. Leadership development is just as important today as it was 2,400 years ago in the time of Plato.

Other countries primed to grab U.S. jobs, September 9, 2007, 2D.

The book, “The World is Flat” by Thomas Friedman, chronicles the rapid expansion of global business in recent decades. The increasing development and use of information technology has fueled that growth. In many ways, it is now just as easy for organizations to communicate and collaborate with partners on the other side of the world as it is someone next door. Additionally, today’s information and computer technology has empowered individuals to start and run businesses with widespread reach and few start-up costs.

Among the causes of the explosive growth in global collaboration described by Friedman is the migration of knowledge-based jobs to Russia and other former Soviet states, China, and India. The combination of low wages, massive numbers of highly educated and skilled workers, and information technology has allowed many types of work, that until recently could only efficiently be done locally, to be sent overseas to foreign workers. Friedman says that although the workforces in India, China, and the former Soviet states still lag behind the United States in many ways, they are gaining on us quickly and intending to pass us. His book is a warning to Americans that we must change our education system and national priorities to emphasize science and mathematics or else we will soon find ourselves lagging behind other countries in innovation and creation of new technology and world-changing research and development.

Friedman describes that the people who want our jobs are primarily from China, India, and the former Soviet states. The immense populations and numbers of highly educated and skilled workers in those countries dwarf the highly trained human resources of the United States. When you realize how hungry the people in those countries are to improve their living conditions through jobs in high technology and knowledge-based work and how much their governments and cultures emphasize and encourage people to pursue science and mathematics education, one cannot help but think that someday Americans will be looking at those countries through our front windshields rather than out our rearview mirrors.

This past summer, I spent my sabbatical from HSU teaching business courses at The International University in Vienna, Austria. I had students from many parts of Europe, Asia, and Africa in my classes. The mix of people, cultures, and languages made for fascinating teaching experiences. My students were eager to learn business, economics, and e-commerce and to improve their English language skills (for many it was a third or fourth language) for use in future positions in their own companies, in organizations in their home countries, and in multi-national firms. The majority of my students were from the former Soviet states, China, and India—the people who Thomas Friedman writes about in his book. It was extremely fascinating to learn about and discuss Friedman’s ideas with students (undergraduate and graduate) from those particular parts of the world.

Over the next several months, I will use this column to share some of the insights gained from my sabbatical experiences teaching at The International University in Vienna. Auf Wiedersehen.

From the mouth of a pig, good management advice, May 13, 2007, 2D.

The 1995 movie “Babe” introduced the world to Farmer Hoggett’s talking sheep and barnyard animals. Babe the pig was the star of the movie along with his co-star Fly the border collie, who became Babe’s adoptive mother. Fly comforted Babe and counseled him on how to fit in on the farm. She even tried to teach Babe how to herd sheep.

In one scene, Farmer Hoggett sends Babe into a corral with instructions to round up some sheep and lead them out. Being Babe’s first time to undertake such a task, he is uncertain how to get the job done. He first tries running into the sheep pen making dog noises, but the sheep ignore him. Babe and Fly then have the following conversation:

Babe: This is ridiculous, Mom!

Fly: Nonsense, it's only your first try. But you're treating them like equals. They're sheep, they're inferior.

Babe: Oh, no they're not.

Fly: Of course they are. We are their masters, Babe. Let them doubt it for a second and they'll walk all over you.
Babe: They'll laugh at me.

Fly: Then bite them! Be ruthless, whatever it takes. Bend them to your will!

After biting one of the sheep on the leg, Babe is reprimanded by the sheep and begins to cry. The sheep tell him that he does not need to be mean and bossing, rather, he should just ask them kindly. Babe did, and the sheep willingly complied. After completing the task, Fly asked Babe:

Fly: All right, how did you do it?

Babe: I asked them and they did it. I just asked them nicely.

Fly: We don't ask sheep, dear; we tell them what to do.

Babe: But I did, Mom. They were really friendly.

Babe’s experiences with the sheep demonstrate Douglas McGregor’s concepts of Theory X and Theory Y management. McGregor’s theories describe two different attitudes that mangers have about workers. A Theory X attitude is one that workers inherently dislike work and will try to avoid it if they can. Theory X managers view workers as lazy, irresponsible, untrustworthy, and in need of firm and constant supervision.

A Theory Y attitude is that workers desire to excel and are inherently good and eager to work. Theory Y managers try to create positive work environments for their workers and provide them with growth and development opportunities. Theory Y managers respect, trust, and look out for the best interests of the workers—which is typically returned by the workers. Babe’s Theory Y attitude toward the sheep led to the film’s memorable ending.

The attitudes that managers have about their workers come out in the ways they work and interact with them. Theory X managers tend to rely on coercion and intimidation to get workers to perform. Theory Y managers use persuasion, inspirational appeals, and personal power. Optimal work outcomes tend to arise under conditions of mutual trust, respect, and cooperation—a consequence of Theory Y attitudes. Maybe we can all learn something from a talking pig.

Integrated Marketing Plans, May 6, 2007, 2D.

At one time or another, everyone has probably had to scrounge through his or her refrigerator and pantry for food. When food at home is scarce, meals usually end up being a disjointed assortment of random foods. Frozen waffles, soup, cereal, apples, and macaroni and cheese might be combined to make a meal. What makes those types of meals strange is not the individual components, rather, it is their combination. The combination of foods comes from the items that are available when needed and not as the result of conscious and purposeful planning.

A well-balanced and nutritious meal is one that includes items from a variety of food groups. Meats, grains, dairy, fruits, and vegetables should all be represented in a healthy meal. The servings of foods from the different groups should be properly proportioned so that one category does not dominate or overwhelm the diet. Likewise, the amounts of food served to people should be appropriate to their sizes, appetites, diets, and ages. A small child requires and should receive less food than a grown adult.

Supplying the body with healthy food requires effort, planning, and discipline. Healthy eating is an on-going process rather than a one-time activity. As we age, the types of foods that the body requires changes. The foods that were required when we were young are not necessarily the best foods for us when we get old. People must know their bodies and continuously work to ensure that they are supplying themselves with the best food possible.

The concepts of preparing and consuming healthy meals are very similar to developing and executing well-balanced marketing plans for organizations. Marketing involves the business functions related to creating profitable exchanges with others. Developing products and services, setting prices, determining distribution channels and outlets, and promoting and selling the offerings to customers are the heart of marketing. Healthy firms devote considerable time and energy into ensuring that all of their marketing efforts are active, balanced, and contribute to the success of the firm.

When many people think about marketing, they primarily think of the promotion and personal selling aspects of marketing. Letting potential customers know that your company exists and telling them what you have to offer (and at what prices and locations) is important to creating profitable exchanges with others. Promotional and sales efforts include such things as print and broadcast media, personal selling and network marketing, advertising and publicity, and web and interactive media. A balance of these marketing elements is also needed to build a healthy marketing campaign.

Coordinating and executing planned marketing efforts across an entire firm is known as Integrated Marketing Communication (IMC). Like a well-balanced meal, the IMC elements need to be combined to maximize its effectiveness. Relying on only one element might not be the healthiest alternative for a firm. The resources invested in various marketing elements should be made in relation to the age, size, and goals of the firm. The IMC process must be planned and it should be evaluated and corrected continuously.

Pay attention to debt financing, December 29, 2006, 2D.

This year’s Christmas (and post-Christmas) shopping season is quickly coming to an end. Many shoppers used credit cards to pay for their Christmas purchases. There are many reasons why consumers use credit cards rather than cash, checks, or debit cards. Some used them for the convenience that comes from being able to make one payment to the credit card company rather than many individual payments to merchants. Others wished to take advantage of rebates and bonuses that they earn by using their credit cards. Some wished to defer the actual payments of the purchases until the credit card bill comes due, and others used their cards because they did not have cash on hand and felt that borrowing the money through their cards was their best option.

The ability to purchase on credit makes it easier for consumers to buy the goods and services they desire. The well-publicized downside to making purchases on credit cards is that they build debt. Carrying too much debt prevents consumers from being able to save and invest money for use in the future or to take advantage of productive opportunities that come along.

In some cases, acquiring debt to fund purchases is a desirable thing to do. When buying a rental property, for example, it is often cost-prohibitive for buyers to fund the entire purchase with cash. Rather, buyers pay a small portion of the sales price in cash and borrow the remaining funds from a lender. The rent charged to tenants should cover the costs of the loan payment plus other expenses.

When goods and services are bought with debt financing, different sets of concepts arise. Most things bought with credit cards do not provide a profitable payoff like a rental property. Consumers must understand when to carry debt and when to pay it off. Financial theory suggests that excess money should be used to fund the activities with the highest returns—or pay off debts with the largest costs.

If given the choice between an investment that returns 5 percent and one with equal risk that returns 15 percent, the alternative that returns 15 percent should be chosen. The same principle holds true when evaluating whether to use money for investing or paying off debt. Many credit card companies charge customers 18 percent (annually) or more on outstanding balances. Paying off a debt with 18 percent interest should be thought of as an investment that yields an 18 percent return with no risk. When excess cash can be invested to earn more than the rate paid on debt, the investment should be chosen over debt reduction. In reality, however, very few investments provide greater rates of return (with no risk) than credit card rates. Carrying a balance on a high-interest credit card makes little financial sense when the money to pay off the balance is sitting in low-return investment accounts.

With the advent of this year’s bill-paying season, spend some time evaluating ways to make your money work best for you.

Solve problem, go on to other task, September 29, 2006, 2E.

If you have ever been in the middle of a home-repair job and gotten stuck because you needed help holding something, measuring or eyeballing a position, or assistance locating, retrieving, or operating a specific tool, you can probably remember feeling frustrated about not having help and feeling perplexed about how to accomplish the task alone. Lacking tools, assistance, or the understanding required to accomplish a task seems to focus a person’s thoughts and energies into overcoming the obstacles hindering task accomplishment. Once the needed help is received and the hold up is overcome, the issue that caused the obstacle no longer directs one’s thinking and is quickly forgotten—the person’s thoughts and behaviors move on to the next task.

The processes at play on individuals completing personal tasks are also very relevant to organizations. Organizations exist to complete work that is inefficient, prohibitive, or impossible for individuals to complete alone. They require that individuals work together in pursuit of a common goal. Understanding organizations means understanding people and how and why they work.

Motivation theory helps explain why people do the things that they do. Motivation is that which provides arousal, direction, and persistence to behavior. “Needs” theorists argue that motivation comes about from a desire to fulfill unmet needs. When something is needed, it means that it is required, but not present or available. The absence of the thing that is required creates tension in people and drives their behavior to fulfill the need. Once a need is met, it no longer creates tension on individuals or motivates them to satisfy the need. Feelings of hunger or thirst, for example, will drive people to satisfy those needs by drinking or eating. Once the feelings of thirst and hunger disappear, they will no longer consume peoples’ thoughts or direct their behaviors.

Abraham Maslow’s Hierarchy of Needs is a well-known needs theory. Maslow described five needs that guide and direct human behavior and which operate in a hierarchical fashion—that is, higher-level needs kick in after lower-level needs are met. From lowest to highest, Maslow named those needs: physiological, safety, belonging, esteem, and self-actualization. As described, these needs range from: issues of basic survival and safety; to feelings of inclusion, love, status, and self-respect; to heightened levels of awareness, growth, potential, and striving. As Maslow suggested, high-order needs only become motivators after lower-level needs are raised and satisfied.

For organizations that want workers to think big and desire big things, Maslow’s ideas suggest that organizations must first fulfill their workers’ lower-level needs. Some specific ways that organizations might do that are to provide: sufficient pay to cover survival needs, safe working conditions, insurance and retirement benefits, opportunities to form meaningful relationships with others, status symbols, and environments that make workers feel good about themselves. Maslow’s theory suggests that only after lower-level needs are satisfied can self-actualization needs kick in and operate on workers. To achieve that, organizational leaders must create organizational systems that meet lower-level needs and encourage needs for self-actualization.

Some businesses require more start-up time and effort than others, July 28, 2006, 7D.

Most people typically look at a variety of homes before choosing one to buy. With each home visited in the search process, potential buyers evaluate the condition of the house and assess how much work will be required to make it ready to live in. Some houses might require maintenance, redecorating, or remodeling while others might be in “ready to move into” condition and require minimal work for the homebuyer. The amount of work required to make a new house “livable” for the buyer is dependent upon the needs, wants, and interests of the buyer and the characteristics of the home. Some houses are easy to move into and others require some work.

The same notions hold true for starting a business—some are neat, clean, and easy to start while others require considerable work and preparation to make them ready. Businesses exist to exchange goods and services for resources with those outside the organization. Anything that is wanted or needed by people in a society can be the source of a business venture. There are several options available to people wanting to start and run their own business—each with different degrees of work required to get it up and running.

One option is to start your own business from scratch. The advantages to this method include being able to build and shape the venture from the ground floor up with total freedom and control. Building from nothing is also the biggest challenge for business people choosing this method. Without a stream of customers or proven method or model of success, entrepreneurs starting from scratch face tremendous uncertainty and risk. The amount of work required to build a business from scratch can be considerable.

Another option is to buy an existing business or buy into a business system. Purchasing an existing business could be an advantage because it might have a record of successful operation and a favorable reputation with customers, suppliers, and people in the community. It is also possible to inherit a poor business reputation from previous owners.

Franchising and business opportunities are two other methods of buying into proven business systems. Some of these options come with complete “turn-key” solutions—where new business owners need little more than to open their doors for business. Having proven sales and marketing systems and providing new business owners with all of the things needed to start and maintain the business make these options very attractive to many people.

Before choosing to start a business, prospective entrepreneurs should thoroughly investigate their options and research the costs and investments associated with various alternatives. Many sources of information exist for people who need help assessing business ideas and opportunities. Aspiring entrepreneurs can find books, websites, and college courses dedicated to entrepreneurship and small business. The government also provides a wealth of information to citizens through the U.S. Small Business Administration (www.sba.gov), local Small Business Development Centers (including one in Abilene), and related agencies and programs. For more information about resources and issues to consider before starting a business, visit the HSU SIFE website at www.hsusife.com.

Business success requires a game plan, June 16, 2006, 9C.

Watch any pre-game commentary during football season and you will see and hear sports broadcasters discuss the keys to victory for each team. The comparable strengths and weaknesses of each team are analyzed and the game plans for victory are described. As the games play out, each team is typically evaluated on how well it executed its game plan and how well it reacted and adapted to the play of its opponents.

The development of a game plan comes from a process of analysis, goal setting, introspection, comparison, evaluation, and forecasting. Before each game, coaches take stock of their team’s talent and make note of injuries and player health. They also learn about the health and abilities of the upcoming opponent. Coaches look over game film, of their team and the opponent’s, to discover strengths that might be used and weaknesses that might be exploited. Once a proper assessment has been made about their team’s abilities and how those abilities match up against the abilities of the opponent, then a coaching staff can develop a feasible game plan for victory.

The processes for developing winning game plans for sports teams are similar to developing winning strategies for success in the business world. Strategies are linked to goals. Goals for sports teams are usually pretty clear—to win the game or competition. Goals in business organizations can sometimes be less defined, conflicting, contradictory, or confused. When identifiable goals do exist, it is necessary to develop a “strategy” to attain those goals. Strategy describes the methods, actions, and procedures needed reach the goals.

Once goals have been defined and agreed upon, managers should engage in deep introspection. The strengths and weaknesses of the organization should be studied. Strengths are those characteristics or abilities that the organization possesses that can give it a competitive advantage in the marketplace and might include experience, production efficiency, exclusive information, market share, customer service, or distribution methods. The absence of these same characteristics might be weaknesses for a company. Weaknesses are those things that could be exploited by competitors or that might hinder goal attainment.

In addition to introspection, managers must also look outside the organization to identify possible opportunities and threats. Opportunities are things that exist in the organization’s environment that could benefit the company. Threats are those things that might harm the company. Changing consumer demand, demographics, legislation, environmental factors, technology, competition, and economic factors might all be viewed as opportunities or threats depending on their effect on the company. Opportunities and threats could exist as short-term or long-term and could have immediate or future influences on the organization. Managers must be able to see current opportunities and threats and be able to forecast and predict future influences.

Only after strengths, weaknesses, opportunities, and threats are identified and analyzed, should organizational leaders begin developing strategies for success in the marketplace. Just as coaches spend a great amount of time and effort developing game plans for success, so too should organizational managers and leaders.

Learning statistics like learning a language, May 26, 2006, 2D.

When many people think about statistics, they often cringe. Reasons for this are probably widely varied. Some people may have phobias that have followed them into their adult lives from their mathematics and quantitative courses in high school or college. Some may be intimidated by the complex sounding lingo of the field. Others may avoid ever approaching the topic due to beliefs that the concepts are too difficult to learn, that conclusions can be manipulated to meet the will of the investigator, or that the techniques are not really useful. In the view of many, “statistic” and “sadistic” are two words that can be used interchangeably.

In reality, none of those are valid reasons to avoid or shun statistics. While statistics involves the use and manipulation of numbers, the emphasis for practitioners is not on mathematics, but on interpretation and analysis of validity. Computers can now perform complex mathematical computations quickly and accurately. It is now most important for users of statistics to understand how to apply statistical tools and techniques and to interpret results. Mastering these concepts can help managers in their jobs.

Managers are problem solvers. When confronted with exceptions to established work processes, managers step in to resolve the exceptions with their organization’s best interests in mind. If there were no organizational problems, the manager’s job would be that of an engineer. The manager would simply designate a level of performance, adjust the appropriate controls on the “machine,” turn on the machine for a determined time, and then turn off the machine at the end of the day. Periodically, the manager would have to perform maintenance or repair and occasionally upgrade the equipment with a better model. There are very few organizations that operate like machines. Most managers deal with work process problems, individual problems, group problems, organizational problems, and problems that arise from sources outside the organization. A manager’s job is very complex—a variety of skills, competencies, and problem solving tools are needed to be successful.

Statistics is a decision-making tool. It is a way to draw information from data—which is then used by managers and decision-makers to solve organizational problems. There are two basic types of statistics, descriptive and inferential. Descriptive statistics “describe” the data (the number of data points, the middle of the data range, the dispersion of numbers, etc.). Inferential statistics is more complex than descriptive statistics because it involves “inferring” measures drawn from a sample to a population. A host of errors and threats to validity can creep into inferential statistics. Conclusions are drawn using the notions of sampling theory and probability.

With a little time and effort, almost anyone can learn the fundamental tools and techniques of statistics. In many ways, learning statistics is like learning a language—a language that uses numbers, logic, and scientific analysis. The conclusions drawn from properly conducted statistical analyses provide sources of information for managers that cannot be gained solely from experience, intuition, or professional judgment.

Why social conformity can be bad in the workplace, April 14, 2006, 2D.

Did you realize that our beloved Abilene has its own paradox? In fact, among organizational researchers and social psychologists, the “Abilene Paradox” is quite well known and provides a great example of how groups work and warns of the danger of unquestioningly following the norm.

Jerry B. Harvey in his book, The Abilene Paradox and other Meditations on Management, tells a story of a family from Coleman, Texas who, when prompted by a family member to drive to Abilene for dinner, pack themselves into an unairconditioned 1958 Buick and travel to Abilene. Four hours later, after a hot and dusty, 106-mile round trip excursion to Abilene for a less-than-satisfying meal, the family returned to their home in Coleman. Later discussion revealed that no one in the family actually wanted to go to Abilene, but they all went because they thought that everyone else wanted to go. To avoid possible disagreement and turmoil, they all willingly did what they thought the group wanted to do, when in reality, no one in the group actually wanted to do it.

The concepts at play among the family members in the Abilene Paradox demonstrate the powers of social conformity. Organizational researchers use the term “groupthink” to describe such processes. Groupthink refers to the tendency for individual group members to suppress and not give voice to their individual thoughts and ideas in the presence of an idea that seems popular with the group. It arises when group members conform to the will of the group to avoid disagreeing with the group and creating conflict and appearing as bad team players. But as the paradox shows, sometimes the will of the group is not the will of any individual member.

Devil’s advocates resist the tendencies of groupthink and social conformity. A devil’s advocate is a group member who rationally questions solutions and recommendations—often forcing group members to analyze, explain, and defend their recommendations. Through that evaluation process, modifications to proposed courses of action might be developed or selected solutions confirmed. Research findings show that groups with devil’s advocates tend to outperform groups that do not have such members. Ironically, the same research also shows that group members, when given the opportunity to evict someone from the group, consistently choose to kick out the devil’s advocate—the one who leads them to better performance. People prefer conformity, ease, and conflict avoidance to questioning, disagreement, and better-reasoned solutions.

Managers and organizational leaders must understand and recognize the tendencies of individuals to conform to group pressures. In some cases, social conformity is desired and can be used to wrangle in wayward individuals, create a sense of belonging, and build group identity. In other situations, however, the processes of social conformity and groupthink can lead groups to derive less-than-optimal solutions to organizational problems. Work cultures must be created that value teamwork AND individual input and the questioning of solutions, procedures, and methods of operation. By doing so, organizations can reap the benefits of groups and maximize the power of their individuals.

Social facilitation: Handling pressure during performance, March 31, 2006, 7D.

It is not uncommon to see individual athletes perform in extraordinary ways when team, media, and fan attention shines on them. Neither is it rare to see athletes crumble and melt under pressure when competition begins. When the lights come on and the crowds begin to cheer, some athletes seem to rise to the occasion and perform beyond their limits while others seem to lose confidence, concentration, and the ability to perform. Why and how do those differences occur?

Psychologists and organizational researchers refer to this phenomenon as social facilitation. It posits that individuals perform differently in the presence of others than they do when they are alone. Knowing that others are observing them brings about a state of physiological arousal that causes people to act differently than when they are unobserved. That “charged” physiological state tends to energize people when performing physical tasks. Whether an individual uses that energy to enhance or harm performance is influenced by the nature of the task and whether the person is comfortable and confident performing the task.

When people perform physical tasks with which they are very comfortable and confident, the energized state tends to enhance performance. In other words, when tasks are perceived as easy, the presence of others positively affects performance. Highly trained athletes probably set more performance records during important competitions than in the presence of only their coaches during practice. In an opposite manner, difficult tasks, new tasks, and tasks that people are uncomfortable and unconfident with, tend to negatively affect performance when conducted in the presence of others.

Social facilitation also has a mental component. Performing in front of others brings with it an expectation that others will evaluate the observed performance. Questions such as: “What will others think about my abilities?” and “Will others view me as an asset or liability?” run through the minds of individuals when performing in the presence of others. Perceived positive evaluations enhance performance. Perceived negative evaluations will unnerve and distract the performer and subsequently harm performance.

The same processes at play on athletes in competition occur in people in everyday organizations. To make people feel good about themselves and to perform their best, they should be put into situations where they can perform tasks, at which they are skilled and regard as easy, in the presence of others. To avoid the negative consequences of social facilitation, managers should make sure that workers have chances to learn and become comfortable with new and difficult tasks by themselves before working in front of others.

Groups can outperform individuals on physical tasks because of the greater effort that can be generated by more people. Through the processes of social facilitation, groups can also enhance the performance of individual members and synergistically produce an output greater than the sum of performances of individual members in isolation. Managers and organizational leaders should use these concepts to maximize individual, group, and organizational performance.

There is more to setting up a shop than a good product, March 10, 2006, 6C.

You have just come up with THE perfect business idea—a product or service that you think countless people will want and demand. It is time to get a business banking account and lease a building, right? Not yet.

Businesses exist to conduct exchanges with others. Individuals and organizations outside of the firm exchange their resources for the products and/or services of the business. Without those exchanges, businesses will be unable to cover costs and meet expenses and will eventually go out of business.

The product or service that a firm offers is critically important in creating exchanges, but equally important are the prices that the firm charges, the ways that consumers are made aware of and encouraged to trade with the firm, and where and how to get the product or service to the consumer. In marketing, those ideas are known as the marketing mix—product, price, promotion, and place.

A good product or service satisfies needs or wants. Necessity goods and services meet basic human needs (e.g., food, clothing, shelter, medical service, etc.). Luxury goods and services go beyond basic needs. An expensive dinner at a fine restaurant satisfies basic hunger needs, but might also satisfy self-esteem and ego needs. Because there is usually a premium paid for luxuries, their demand is typically affected more by price changes than necessities.

There is no magic formula used to determine prices. Lower prices create more demand than higher prices, but the profits gained from each sale are also lower. A higher price might bring in greater profit on items sold, but fewer consumers will be willing and/or able to pay higher prices. The trick is to find a price that is low enough to generate demand, but high enough to cover costs and provide enough profit to make the venture worthwhile.

If no one knows that your firm exists or what you offer, you may as well not exist. Advertising and promotional activities are needed to create exchanges with consumers. It is important that consumers recognize your firm as the place to fill needs and wants. Incentives and promotions should be used to introduce, remind, encourage, and compel consumers to trade with your firm.

Exchanges with consumers need to occur in places and at times that are convenient for them. Care should be taken when choosing locations for sales, service, and supply outlets and setting times of operation. Visibility, convenience of location, and proximity to target markets should all be considered when choosing a location. For firms that distribute their offerings across a wide geographical area, locations with access to proper distribution systems should be selected.

To succeed in your venture you must offer a desirable product or service, make consumers aware of your offerings, supply consumers at the times and places they require, and charge prices that are deemed attractive, yet profitable. So before running out a setting up a business, spend the time and resources needed to thoroughly evaluate all aspects of the marketing mix.

A lesson in diminishing marginal productivity, February 3, 2006, 2D.

If you are a fan of Bugs Bunny, you might remember the “Baseball Bugs” cartoon where Bugs Bunny heckled the Gashouse Gorillas from his rabbit hole in the outfield of a baseball stadium. After bragging that he could beat the Gorillas all by himself, he was yanked from his hole and made to live up to his words. Bugs played every position—he pitched, caught, and fielded balls by himself. He eventually beat the team of behemoths on a glove-tossing catch from the flagpole of the Empire State Building.

The notion of the episode was absurd (and not because it involved a rabbit playing baseball) because it would be impossible for an individual to defeat a team in a team sport. A team with fewer than nine players is disadvantaged because positions are left vacant—and that weakness can be exploited. Would a team with nine players be at a disadvantage to a team with more than nine players? Probably so.

Ten, eleven, or twelve players would probably provide considerable extra field coverage for a team. However, fielding 100, 500, or 1,000 defensive players would probably complicate things so much that the extra costs required to recruit, train, compensate, and manage the players would not be worth the benefits that they would add to the team.

It is natural to imagine that a bigger group of people can accomplish more than a smaller group. If you have ever moved a piano, you probably appreciated having others aid in the effort. The more people who add their strength to such a task decreases the average load that each individual has to carry. However, after a certain point, adding more people to the task actually becomes a hindrance to the performance of the group. People begin to get in the way of each other and to make the collective work of the group more difficult to coordinate.

Each additional person added to a task will reduce the burden of the workers in the group, but the benefit gained from each new worker will be less than from the previous worker. For example, a third piano lifter will reduce the burden of each lifter from 50% to 33% of the weight of the piano (a 17% reduction). Adding a fourth lifter will reduce the burden from 33% down to 25% (a 8% reduction). Economists refer to this concept as “diminishing marginal productivity.”

After a certain point, the added benefit of another person will not be worth the cost of adding another person. Nine eager piano lifters may choose go on and move the piano themselves rather than wasting time waiting on a tenth, extremely late helper. The point to stop bringing on new workers is when the cost of a new worker exceeds the added benefit of the worker.

Just as with baseball and piano moving, some work in organizations requires collective action. It is important for managers to identify the optimal sizes of their work groups. Too big, and the organization will waste human and organizational resources, too small, and the organization will lose out on performance—unless they have a secret rabbit they can call in from the outfield.

For Fun--enjoy!

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